03/31/2017

Mere Percentages

Let's begin by confirming something you probably suspected: that wage cheating occurs because the employer can make more money that way. Having said that, we need to see how much money this entails. The answer is, usually not much, but then, it doesn't have to be.

You see, most wage cheating occurs on a very small scale, below the radar. Among the better examples are the shaving of time and shift-stretching. Imagine you have a machine shop or small grocery, each with ten hourly workers. The grocery has to open promptly at eight; the machine shop owner requires his workers to be running their mills at the same hour. The grocery workers show up, don their work clothes, and are ready for the first customers at the appointed hour. Likewise, the machinists are at their stations right on time. And in such cases the workers almost always are working unpaid minutes every week. These minutes turn into hours, and often into overtime hours, that aren't paid, or aren't paid correctly.

If the grocery workers show up fifteen minutes early five days a week, that means an hour and a quarter every pay period. Small potatoes? Perhaps. But as our friend Karl Marx pointed out, moments are the elements of profit. And profits in the grocery business are on the order of single digits--and usually closer to zero than nine. Saving a few pennies on wages, which are the most expensive outlay in just about any business, is good strategy. And the value of this strategy is that it requires neither threats nor coercion: your proprietor simply requires that his crew be running at a particular hour; cease at another, and make the arrangements themselves. It all seems so natural, so legal. Integral to these arrangements is the common misunderstanding among workers that they are only to be paid for work as commonly understood, meaning, not beginning until the first turn of the wrench.

And another problem: if one of these workers decides or is informed that she is due pay for the preparation time and the after-shift work, she will undoubtedly compare the potential trouble from the complaint with the likelihood of benefit--and forget the whole thing. Disgruntled workers do not complain nearly as often as disgruntled former workers, for just this reason.

And so we have the situation of the small employer, who cadges moments and pay from workers in an almost innocent way, by relying on their sense of responsibility to the work and the firm. He saves a bit in wages and is that much further ahead.

Your large employer cheats in a different way, but for the same reason. There is only a difference in scale--but also, and most crucially, in the locus of culpability.

Imagine now a big-box general merchandise store, one of a chain of hundreds spread across the nation. The owners (and/or stock holders) are miles distant from any particular outlet; certainly they do not make out the payroll or work schedules for the shop in your town. Where your small-time operator is personally responsible for most every aspect of his firm, the big fish owners aren't. They just maintain an HR department, a bank of computers and a staff of accountants to accomplish this--all of which might as well be on the moon.

Wage cheating in large chains occurs because of downward pressure exerted from the top: in policies that are carried way down the line, all the way to first-line supervisors whose first and most important responsibility is to do a particular volume of sales beneath a particular amount of wage expense. That's where the fun starts. Nobody in Corporate tells, or has ever told, anybody down on the shop floor to cheat anybody: in fact their personnel manuals all carry specific instructions on how to pay in accordance with the law. The cheating comes about because of the demands on the lowest-level supervisors, who, if they ever want to become higher-level supervisors, or even just keep their jobs, will find a way to run the shop within the projected budget.

And so it is that workers work uncompensated overtime; that hours are not recorded; that you see all these multi-million dollar payouts from agencies and class-action suits for violations of wage standards. And why it is that the Corporation can honestly deny that it told anybody or would have permitted anything like the cheating that resulted. In the end, your giant corporate entity pays some back wages, perhaps some penalties and legal fees, and marches forward to the next set of violations.